China real estate stocks soar

Evergrande shares jumped more than 80% in Hong Kong today, while Country Garden rose nearly 30%.

Chinese real estate stocks surged on Friday after Country Garden paid two $22.5 million in interest on bonds it had missed in early August. The payment, made before the grace period ended, helped it avoid default.

Shares of the debt bomb Evergrande at one point rose 82% on the Hong Kong Stock Exchange. At the close of trading, they rose 65%. Country Garden shares rose 26%. Logan Group rose 28%.

Real estate was also the biggest gainer in the Hang Seng Index today. The index tracking mainland Chinese real estate firms listed in Hong Kong rose 4%.

China’s real estate sector has yet to recover from Evergrande’s 2021 debt default. Last week, the company’s shares resumed trading after a 17-month hiatus and closed down 80% in their first session. Yesterday, Evergrande shares closed at just HK$0.35.

Shares of other developers have also plunged this year amid concerns about the spillover effects. Country Garden has fallen 53%, while Logan has lost 18%.

Today, China's Securities Times published a commentary calling for "restrictions on home purchase policies in cities" to be lifted as soon as possible.

The paper said that "in the context of major changes in the supply-demand relationship in the real estate market, it is no longer appropriate to maintain policies introduced to tighten speculation." Securities Times urged authorities to increase support to boost sales, thereby releasing pent-up demand due to "rigid" policies.

Ha Thu (according to CNBC)

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